South Korean Authorities Freezes $92M Worth of Terra Assets

More than six months after the collapse of the Terra ecosystem, South Korean authorities continue to investigate and freeze the funds of persons involved in Terra.

Shin Hyun-Seong, a co-founder of Terra, had 140 billion won ($108 million) seized from him in November, and the Seoul Southern District Court has just decided to seize more Terra-related assets. According to The Korea Economic Daily, on December 20, a South Korean court ordered the assets of the current and past CEOs of Terraform Labs’ subsidiary company Kernel Labs to be frozen at 120 billion Won ($92 million).

Kernel Labs is a blockchain consulting company that specializes in decentralized apps and blockchain payment networks. It was founded in 2018. Due to CEO Kim Hyun alleged prior employment as Terraform Labs’ vice president of engineering, it is thought that Kernel Labs and Terraform Labs have a tight working relationship. Some publications claim that Kernel Labs workers also worked for Terraform at its South Korean headquarters

Kernel Labs CEO Under Investigation

The Seoul Southern District Court has granted the prosecution’s plea to take the property of seven persons who were involved in selling pre-issued Terra (LUNA) tokens in order to generate enormous profits, according to a recent article.

One of the parties implicated in the case is Kernel Labs CEO Kim, who is said to be in possession of the highest amount of unlawful proceeds from Terra. Kim’s unlawful earnings were worth at least 79 billion won ($61 million), according to the prosecution. Additionally, prosecutors discovered that a previous CEO of Kernel Labs earned around 41 billion won ($31 million) in unlawful gains from Terra.

In 2021, Kim allegedly made a number of significant real estate purchases in South Korea. He paid 35 billion won in November to purchase a building in Gangnam-gu, the priciest neighborhood in Seoul. In June, he also purchased an apartment in Seongdong-gu for about 9 billion won ($7 million). 

South Korean Authorities Still Searching for Do Kwon

The news comes as international law enforcement agencies continue to look for controversial Terraform Labs founder and CEO Do Kwon. The most recent indications indicate that Kwon, who left Singapore a few months ago, is thought to have been hiding in Serbia as of mid-December, according to South Korean police.

The collapse of Terra has emerged as one of the biggest contagions on the cryptocurrency market in 2022. Prior to losing its peg to the US dollar in May, TerraUSD Classic (USTC), an algorithmic stablecoin, was among the top 10 cryptocurrencies. The incident set off a chain reaction that devastated the cryptocurrency loan market by triggering enormous liquidations and unpredictability.